United Commercial Bank vs Dev Raj and Others

M.R. Verma, J.—This order shall dispose of the preliminary objection raised by the judgment debtors that this court has no jurisdiction to entertain this execution petition.

The facts relevant for the purpose of disposal of the aforesaid question are that vide judgment dated October 24, 1991, this court passed a decree for Rs. 3,01,313.15 in favour of the decree holder and against the judgment debtors and now a sum of Rs. 13,16,388.53 has become recoverable on the basis of the said decree, hence this execution petition by the decree holder in which the aforesaid question has been raised for the judgment debtors.

I have heard learned counsel for the parties.

Learned counsel for the judgment debtors contended that the decree being in favour of a bank in a loan transaction, the present petition ought to have been presented before the concerned Debt Recovery Tribunal (hereafter referred to as "the DRT") and this court has no jurisdiction to entertain it.

On the other hand, learned counsel for the decree holder submitted that in case it is found that this court has no jurisdiction to entertain the petition, it may be transferred to the DRT, Chandigarh.

The factual aspects as stated hereinabove, are not in dispute. Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereafter referred to as "the Act") which is relevant to determine the objection raised for the judgment debtors, reads as follows :

"31. Transfer of pending cases. --(1) Every suit or other proceedings pending before any court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal :

Provided that nothing in this sub-section shall apply to any appeal pending as aforesaid before any court.

(2) Where any suit or other proceedings stands transferred from any court to a Tribunal under Sub-section (1),-

(a) the court shall, as soon as may be after such transfer, forward the records of such suit or other proceeding to the Tribunal; and

(b) the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceedings, so far as may be, in the same manner as in the case of an application made u/s 19 from the stage which was reached before such transfer or from any earlier stage or de novo as the Tribunal may deem fit."

It is evident on a bare perusal of the aforesaid provisions that all suits and other proceedings based on such a cause of action which if accrued before the establishment of the DRT, would have been instituted before such DRT by virtue of provisions of the Act, pending before any court immediately before the establishment of the DRT under the Act, shall stand transferred to the Tribunal. The expression "other proceedings" as used in the aforesaid section, is comprehensive enough to include "execution application". Thus, all the pending suits or applications/proceedings including execution applications in respect of which the DRT has the jurisdiction, shall stand transferred to the Tribunal by virtue of the provisions of Section 31 supra.

The mere fact that the present application has been filed after the establishment of the DRT in a suit which was decreed by this court when there was no Tribunal, does not in any way exclude the jurisdiction of the Tribunal to entertain the present application.

To hold the contrary will be contrary to the intents and purposes of the Act. In view of this position in law and the amount sought to be recovered being more than Rs. 10 lakhs, the DRT alone has the jurisdiction to entertain this petition.

The view I have taken hereinabove is fully supported by the decision of the hon''ble apex court in Punjab National Bank, Dasuya Vs. Chajju Ram and Others, In this case, the civil court passed a decree in favour of the plaintiff for recovery of money on February 16, 1994. On December 21, 1994, an execution application was filed by the plaintiff before the civil court which passed the decree. In the meanwhile on June 25, 1993, the Act had come into force and on August 30, 1994, the Debt Recovery Tribunal was established. On application moved by the plaintiff on February 18, 1997, the said civil court ordered transfer of the execution proceedings to the DRT. On the matter being carried to the High Court, the High Court set aside the order of the civil court holding that the execution proceedings could not be transferred and only the civil court, which passed the decree, could execute the same. It was also held that the original decree was only for Rs. 6,19,250, therefore, the Tribunal would get no jurisdiction to entertain the application. Aggrieved by the orders of the High Court, the plaintiff-bank went in appeal before the hon''ble apex court. The hon''ble apex court, relying on the provisions of Section 31 of the Act, held as follows 102 Comp Cas 44

"A bare reading of the aforesaid Section shows that the execution application being a proceeding pending in a civil court when the Act came into force was liable to be transferred to the Tribunal because the amount for which the execution application had been filed as per the decree which had been passed, was over Rs. 10 lakhs."

While referring to the provisions of Section 31A of the Act, the hon''ble apex court further held as under (page 44) :

"The aforesaid Section 31A is clearly applicable in the present case. The decree was passed by a court before the commencement of the Amendment Act and the same has not yet been executed. At least after the amendment, it is only the Tribunal which would have the jurisdiction of entertaining the application for execution of the decree inasmuch as the amount due for which the decree was sought to be executed is over Rs. 10 lakhs. We are also unable to agree with the High Court that because the original decree which was passed was for a principal sum of Rs. 6,19,250 the Tribunal would get no jurisdiction. It is to be seen that decree was for a sum of Rs. 6,19,250 plus interest at the rate of I6 1/2 per cent, per annum from the date of filing of the suit till the recovery of money. As and when the amount due to the bank under the decree became more than Rs. 10 lakhs and an application for execution was filed, it could only be entertained by the Tribunal and not by the civil court. It is clear that in view of the provisions of Section 34 of the Act, the provisions of Order 21, Rule 10 of the CPC would have no application."

Thus, in view of the above settled position in law, this court has no jurisdiction to entertain this execution petition which deserves to be transferred to the DRT, Chandigarh.

As a result, this petition is transferred to the DRT, Chandigarh.